Expert Answers: Beauty Retail Edition

We gathered some of the best and brightest minds in beauty retailing (Kelly Kovack, Bettina O’Neill, Lisa Adams, and Roseanna Roberts) for a panel discussion on how your brand can succeed in this competitive, ever-changing industry. This post features a transcript of our panel discussion and audience Q&A. We also encourage you to watch the recording to hear the experts highlight the retail trends that are defining the beauty industry.

When we hear about major beauty retail trends, what do we do? How can we action them?

Roseanna Roberts: Trends really do have to be the right fit for your brand. Just because it’s a trend doesn’t mean it’s going to resonate with your consumer. That’s another reason why it’s so important to identify who your target and audience is, and establishing where you sit in the market. Are you a leader innovating new products in your category or does it make more sense for you to develop products that are more classic or already established. How responsive is your brand to reacting to trends – how quickly are you able to turn around new products? Is it a few months or do you need a longer lead time? Ultimately, can you get into the market fast enough to capitalize on the trends. For example, something like face masks – they’re a evolving trend with foreseeable longevity. So spending time on the development and launch of those, you’ll be able to get into the market at any point and still have relevance. Execution is key and the trend has to have the right tone. It needs to speak to your consumer and not alienate them.

What advice do you have for a new brand just getting into this world? How can an emerging brand grow and get big?

I think emerging brands need to be really thoughtful about their retail distribution strategy. It’s really important that you have a clear path of where you want to be positioned in the market. It’s important that you have the requisite amount of funding in place to support the distribution channel you’re choosing. You also need to understand what it really takes to build a business with that retailer partner. For example, building a business in Target with mass distribution looks incredibly different from the retailer requirements and the amount of capital you need to have on hand than it does to build a business on the opposite end of the spectrum with say one door at a luxury retailer. So it’s not only where you start from a positioning standpoint, which is important, but it’s a lot easier to go down than it is to go from mass to luxury which is almost impossible. It’s also important to understand what you’re truly getting yourselves into from a financial commitment. If you don’t have enough capital to provide the retailer with staffing, with samples, or marketing – the products just aren’t going to move and you’re not going to be there for very long. However, if you roll out too quickly, and you can’t support the number of doors where you rolled out, you can also find yourself in a situation where you have the potential for growth, but you can’t actualize it because you don’t have the capital. So in summary, having a plan and making sure you have the capital to execute it and set yourself on a path for growth is crucial. Everything else can come together.

How important is placement in store? How can a brand secure and maintain that space?

Bettina O’Neill: Placement in store is absolutely crucial. It’s the window to everything else – to potential retailers in other countries, to anyone who may be walking through. It really shows how important that brand is to the retailer. If you’re in a good location, it shows that the retailer believes in you and that you’re successful. Your business must be doing well to be in that location. On the other hand though, it’s always better to have a smaller location in a prime traffic area, as opposed to a giant location away from all the action. An analogy is that it’s better to have a studio on Madison Avenue than a mansion in New Jersey! You want to be visible, productive per square foot. Every walk though that I’ve been on as a merchant, that’s the first conversation for every brand. If that brand is over-productive, then you can look where to move it and if it needs more space. Conversely, if you’re in this huge space and you’re doing decently, if you’re not fully productive in that space, the opposite is true. The senior management will say, “What else can we put in there?”, “Can we cut it in half?”, “What’s the future?”. The space and location is one of the most important things, besides obviously having the right product, price point, and appropriate funding to support it.

What should you know before you “walk down the aisle” with a retailer? How should you go about choosing your select retail channel? (E.g. Saks & Ulta are not a DNA match while Neiman Marcus & Nordstrom are).

Lisa Adams: Do your homework! Familiarize yourself with the target group of retailers you align with, based on your consumer, price point, and how all that fits into the retail space. Learn about their history, and how their trends are changing. What worked three months ago might not be working today. Retailers are changing and how they approach their consumer also changes. How you’re going to build that relationship will need to be for the long term, and it’s your window to success with their buyers. What you don’t want is to have the retailer have a breakup with you. The buyers are considering everything the consumer is saying. Where does your brand fit and how do you keep that on the retail shelf.

What is necessary when making the transition from e-commerce to retail? What is different about what the online shopper wants vs what the retail shopper wants?

Kelly Kovack: I’m not sure that there is such a difference in what they want, I don’t think that consumers today today fall into in an either/or situation. Consumers shop anywhere that’s convenient for them, or in some cases, they are loyal to a retailer in some cases because of things like their loyalty programs. I don’t think consumers are really looking for a different experience necessarily from the brand. I think it’s about convenience. What brands need to think about when they’re thinking about online versus retail and the consumer, is that there is multiple points of purchase for consumers today. They may do research online for your brand, but they might go into a store to make the purchase because they want to touch and feel it. So, you need to have consistency in how you’re presenting your brand – the messaging, the expecations you’re setting. You need to have an omnichannel approach to selling your brand/products. At every touch point, you need to be creating an experience around your brand for the consumer, but it’s crucial that it’s also consistent. After engaging with all the content on your brand, you don’t know what the trigger point is going to be for that consumer to finally to take the credit card out and make the purchase.

How important are field reps? How can a company leverage their reps? What are some examples of beauty brands winning with field sales teams?

Bettina O’Neill: Field reps in my opinion are crucial. They are the mouthpiece of the brand – they’re the ones going into the stores, talking to the sales associates and meeting the department managers. They can also report on what else is out there – if another brand came in, or if your space was changed, or something happened. And also these sales associates really have a short term memmory, so you have to keep reminding them that you’re there. Often, you have to offer an incentive, whether it’s monetary or it’s product. Something to make them feel appreciated. The brands that are most passionate about making their brand successful are the ones who are winning. You don’t need a huge field sales team either – sometimes you can have two people: one that’s focused on being in the stores, and the other who is odealing with the buyers and the orders.

What data does a smart brand bring to their merchant? How can you tell what brands are more on top of data than other brands?

Bettina O’Neill: It’s important to know how the sales were, if you lanched somewhere else. How did you rank? What were the top selling items? Clientelling systems – if you had something that worked somewhere, every retailer is looking for ways to do replenishment and stay on top of the clientele. Also, for me being a retailer or merchant what was important to me if it was a skincare brand was to see clinicals on the products to see you know who was the test group and what kind of improvement it wasn’t wrinkles or whatever it may might be for the the skin I know it’s that’s also very crucial for any type of QVC or HSN it’s very important that you have photos and critical and clinicals.

Kelly: I would also add that retailers already have the numbers on your brand, but you need to understand your business and your numbers in their retail doors the same way they do. You should come prepared really knowing your business inside and out in their door. Don’t come into the meeting looking for them to present that information to you.

What should a brand do when they’re on the shelf for the first 30,60 to 90 days? How can you keep your brand relevant to the consumer and buyer and grow once on the floor?

Lisa Adams: With my experience managing brands, once you get to the “yes” and get on the floor, the impression and connection you make are crucial. Education is number one. You need to educate the sales associates on the floor and get them loving your product. You HAVE to have a great field team – people that are going in the store, working the space, working with the sales associates, working with the department managers, really building this relationship because really this is the anchor of your brand. Professionalism goes a great way – you’re building the relationships with your department heads and merchandising team. Social media and influencers are very important, more so than traditional PR in this space. Innovation is also key.

What’s the best way to promote a product? Is it gift with purchase? Is it a bundle deal? Limited edition collections? Etc.

Bettina O’Neill: I think it depends on the retailer and who you’re approaching. I know for any type of HSN/ QVC they want bundles, special sizes, special prices. If you’re going to a more of a luxury specialty retailer like a Bergdorf Goodman or Barney’s or Neiman Marcus, they want something that’s a limited edition, an exclusive a preview ,something that’s special and unique that they can promote in that way. They don’t have the same amount of buying power to buy an exclusive item like thousands of pieces, so that’s why they’re better with something smaller and special. If you go to more of a department store (traditional like a Macy’s or Nordstrom) they would prefer some type of gift with purchase. You really have to know who your who you’re approaching.

What are your views on the importance of developing virtual make up experiences?

Kelly Kovack:I don’t want to say they’re overrated, because consumers really like them, but I think that they they’re incredibly expensive to pull off. So I think this goes back to sort of Rosanna’s trend summary on knowing about whether a trend is right for you or no.t I’m not sure if I was an indie brand, unless I had an awful lot of money in the bank, that I’d be spending $200,000 on a virtual experience with my brand. I‘d spend the money on staffing stores and content and influencers. So I think it’s I think consumers love them, and I think it has its place, but I think it’s really a matter of understanding if it’s right for your brand and if it’s necessary, really. So, if you’re if you’re a small niche brand there’s lots of ways there’s lots of ways to engage consumers to build brand awareness. I think you know there’s a reason that big brands are acquiring indie brands, so for an indie brands try and go head-to-head with the big guys and this technology, in my opinion is a mistake. I think it’s really a matter of looking at the trend and is it right sized for your business? And that happens to be sort of a pricey one.

During a store visit what determines a field rep’s success or failure?

Bettina O’Neill: Well I would say, it’s positive if you were able to make your brand benefit in some way. Like if you’re able to go in and get a better spot on the shelf, orsecure a little more visual. Were you able to motivate some of the salespeople to have a sale for you? Or to give recommendations for a better freelancer? So I think that’s the type of success, and then you’ll see that pay off – whether it’s immediate that day or later in the week. You just have to be consistent and then you’ll see results.

Big brand owners tend to LOVE their brands more than consumers do. On the trend of consumers more comfortable trusting individual items rather than brands, how can owners of big brands compete and still win on an individual item level?

Kelly Kovack: I think there are big brands that are winning on an individual item level. For example, Lancome’s recent mascara launch has been a huge success. I think big brands win when they sort of approach a product launch in the way that an indie brand would so they’re not just sitting idly by and letting indie brands sort of scoop up market share. They’re really trying as best they can to think like indie brands and be nimble. When they focus on hero product launches they tend to have wins. When they fall back to traditional launches, that just doesn’t quite cut it anymore. It’s all about taking what’s working for indie brands and trying to implement it into product launches.

How do you know which trends are most appropriate for your product and also how important is color?

Roseanna Roberts: Well I think color plays a very big role in beauty and cosmetics. You need to make sure that you have the right shade, but also carrying out color across all of your brand assets from your packaging to your logo. All of the brand assets can really create a cohesive strategy and I think that color also plays a big influence in purchasing decisions, so making sure that the colors are keeping or conveying the right message to the consumer about what your brand is about it’s also really something that a lot of brands overlook but it’s a really important thing to think about.

Based on your retail experience, what’s the worst metric to fall short on that hinders sales during the holiday season?

Bettina O’Neill: Not having the stock that would be the biggest issue, whether it be from you know as a company a vendor being out of stock where they ran out and they were able to supply it or from the retail or not giving you the order in a timely matter and things get stuck whether in customs or somewhere. So I think obviously you need need to have the product, and then I would say you need need to have something to offer, depending upon the retailer. Ask for visibility, whether they have tables that you can be a part of and your rotation or if they have an outpost. This is the time when the business is happening, it’s the most amount of traffic that’s coming to the store, so you really want to have every possible opportunity to be able to display your brand. And it’s also the time to make sure you have the right people selling the brand. You can’t wait until you know the eleventh hour to try to find a good freelancer because they’re all taken. The ones that are available are available for a reason, because they’re as not good, so you really have to invest earlier and you have to have the right people. It’s a several prong process.

That takes us to the end of the panel and Q&A, but we also encourage you to watch the webinar recording to hear the experts highlight the retail trends that are defining the beauty industry.